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AVANGRID (AGR) Inks Deal With Meta, Expands Renewable Operation

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AVANGRID, Inc. (AGR - Free Report) has announced that it has signed a power purchase agreement (PPA) with Meta to assist the latter in lowering its carbon footprint. The company will procure renewable energy from True North — a 240 MW solar farm under development in Falls County, TX, and AVANGRID’s first solar facility in the state. This agreement is in sync with AGR’s objective to generate more clean energy and assist others in lowering carbon emission.

The company’s first solar farm True North, in Texas, is expected to deliver 240 megawatts (MW) of clean, renewable energy by early 2025, once it reaches commercial operations. This project will further expand AGR’s renewable power generation portfolio. It has another 25 gigawatts (GW) of renewable projection under development.

Meta’s global operations have been supported by 100% renewable energy and True North will also support its upcoming second data center facility in the state.

Renewable Generation

Per a U.S. Energy Information Administration (EIA) report, decline in coal usage for electricity generation is offset by an increase in renewable sources of energy, which is expected to rise from 22% in 2022 to 26% in 2024. Per EIA, 63 GWs of utility-scale solar generating capacity are expected to enter service by the end of 2024. For solar energy, in particular, the demand is expected to increase 27% in 2023 and 38% in 2024.

Rising demand for solar energy will assist and benefit all the operators in the renewable energy space.  

Renewable energy sources will grow the most during the next two years, with about 7 GWs of new wind capacity and 29 GWs of new solar PV capacity being installed in 2023. These additions will result in renewable energy resources other than hydropower, accounting for 19% of generation in 2024 compared with 15% in 2022.

Here are a few companies that are also thriving due to solar modules.

First Solar (FSLR - Free Report) continues to expand its operation and cater to the rising demand from customers. It will have a global annual manufacturing capacity of more than 20 GWs by 2025. It is innovating and providing high-quality modules to its customers. First Solar’s Series 6 solar modules are very efficient. The company is investing heftily in the production ramp-up of this module to expand its manufacturing capacity. Further, First Solar’s modules use less water, energy and semiconductor material, which means they result in 2.5 times lower carbon footprint.

The Zacks Consensus Estimate for 2023 earnings per share (EPS) is $6.65, implying a year-over-year increase of 1,721.9%. It had delivered an average earnings surprise of 8.61% in the past four quarters.

SunPower Corporation (SPWR - Free Report) has been efficiently providing services to its customers and has more than 1,000 patents for solar innovation. Recently, SunPower updated its IBC solar panel supply agreement with Maxeon through 2025, to feed the growing demand for residential solar panels in Canada and the U.S.

SunPower’s long-term (three- to five-year) earnings growth is pegged at 48.68%. The Zacks Consensus Estimate for 2023 EPS is 40 cents, implying a year-over-year increase of 21.2%.

Sunrun Inc. (RUN - Free Report) provides residential solar, storage and energy services to its customers. It has also installed more than 53,000 solar and storage systems nationwide, which offer users the ability to power through multi-day outages with clean and reliable home energy. The company is also adding a network of storage capacity, allowing Sunrun to benefit from the rising demand in the storage space.

It delivered an average earnings surprise of 2,534.2% in the last four quarters. RUN reported fourth-quarter 2022 earnings of 29 cents per share, up 866.7% from the Zacks Consensus Estimate of 3 cents.

Price Performance

In the past three months, AVANGRID’s shares have lost 13.2% compared with the industry 9.3% decline.


Zacks Investment Research
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Zacks Rank

AVANGRID currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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